Quarterly Report (10-q)

Date : 05/03/2019 @ 9:07PM
Source : Edgar (US Regulatory)
Stock : Mercadolibre, Inc. (MELI)
Quote : 631.73  -2.22 (-0.35%) @ 10:56PM

Quarterly Report (10-q)







 



UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549





 

 



 

 



FORM 10-Q



 

 



 

 



(Mark One)



 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2019

-OR-





 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission file number 001-33647





 

 



 

 

MercadoLibre, Inc.

(Exact name of Registrant as specified in its Charter)





 

 



 

 







 

 



 

 

Delaware

 

98-0212790

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification Number)

Arias 3751, 7th Floor

Buenos Aires, Argentina, C1430CRG

(Address of registrant’s principal executive offices)

(+5411) 4640-8000

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)



 

 



 

 

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.    Yes       No  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files.    Yes       No  

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definition of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:



 

 

 

 

 

 



 

 

 

 

 

 



 

 

 

 

 

 

Large accelerated filer

 

 

Accelerated filer

 

Non-accelerated filer

 

  

 

Smaller reporting company

 



 

 

 

Emerging growth company

 



If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes       No  



 

 



 

 

8

 

 

Securities registered pursuant to Section 12(b) of the Act:

Title of Class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $0.001 par value per share

MELI

Nasdaq Global Select Market



APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

49,318,513 shares of the issuer’s common stock, $0.001 par value, outstanding as of May   1 , 201 9 .

 



 

 


 



MERCADOLIBRE, INC.

IN DEX TO FORM 10-Q

 



 

PART I. FINANCIAL INFORMATION

 

Item 1 — Unaudited Interim Condensed Consolidated Financial Statements

 

 Interim Condensed Consolidated Balance Sheets as of March 31, 2019 and December 31, 2018

 Interim Condensed Consolidated Statements of Income for the three-month periods ended March 31, 2019 and 2018

 Interim Condensed Consolidated Statements of Comprehensive Income for the three-month periods ended March 31, 2019 and 2018

 Interim Condensed Consolidated Statements of Equity for the three-month periods ended March 31, 2019 and 2018

 Interim Condensed Consolidated Statements of Cash Flows for the three-month periods ended March 31, 2019 and 2018

 Notes to Interim Condensed Consolidated Financial Statements (unaudited)

 Item 2 — Management’s Discussion and Analysis of Financial Condition and Results of Operations

27 

 Item 3 — Qualitative and Quantitative Disclosures About Market Risk

46 

 Item 4 — Controls and Procedures

49 

 PART II. OTHER INFORMATION

50 

 Item 1 — Legal Proceedings

50 

 Item 1A — Risk Factors

50 

 Item 6 — Exhibits

50 

 INDEX TO EXHIBITS

50 



 

 


 

M ercadoLibre, Inc.

Interim Condensed Consolidated Financial Statements

as of March 31, 2019 and December 31, 2018

and for the three-month periods

ended March 31, 2019 and 2018

 



 

 


 



M ercadoLibre, Inc.

Interim Condensed Consolidated Balance Sheets

As of March 31, 2019 and December 31, 2018

(In thousands of U.S. dollars, except par value)

(Unaudited)





 

 

 



March 31,

 

December 31,



2019

 

2018

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$                    1,295,886

 

$                       440,332

Restricted cash and cash equivalents

10,375 

 

24,363 

Short-term investments (238,029 and 284,317 held in guarantee)

1,648,457 

 

461,541 

Accounts receivable, net

34,524 

 

35,153 

Credit cards receivable, net

308,468 

 

360,298 

Loans receivable, net

134,640 

 

95,778 

Prepaid expenses

24,132 

 

27,477 

Inventory

3,003 

 

4,612 

Other assets

60,968 

 

61,569 

Total current assets

3,520,453 

 

1,511,123 

Non-current assets:

 

 

 

Long-term investments

275,432 

 

276,136 

Property and equipment, net

188,956 

 

165,614 

Operating lease right-of-use assets

153,499 

 

 —

Goodwill

89,827 

 

88,883 

Intangible assets, net

17,683 

 

18,581 

Deferred tax assets

160,846 

 

141,438 

Other assets

41,464 

 

37,744 

Total non-current assets

927,707 

 

728,396 

Total assets

$                    4,448,160

 

$                    2,239,519

Liabilities

 

 

 

Current liabilities:

 

 

 

Accounts payable and accrued expenses

$                       246,767

 

$                       266,759

Funds payable to customers

680,746 

 

640,954 

Salaries and social security payable

76,123 

 

60,406 

Taxes payable

34,414 

 

31,058 

Loans payable and other financial liabilities

141,162 

 

132,949 

Operating lease liabilities

12,585 

 

 —

Other liabilities

56,418 

 

34,098 

Total current liabilities

1,248,215 

 

1,166,224 

Non-current liabilities:

 

 

 

Salaries and social security payable

31,827 

 

23,161 

Loans payable and other financial liabilities

602,061 

 

602,228 

Operating lease liabilities

143,047 

 

 —

Deferred tax liabilities

97,006 

 

91,698 

Other liabilities

13,258 

 

19,508 

Total non-current liabilities

887,199 

 

736,595 

Total liabilities

$                    2,135,414

 

$                    1,902,819



 

 

 

Redeemable convertible preferred stock, $0.001 par value, 40,000,000 shares

 

 

 

authorized, 100,000 shares issued and outstanding at March 31, 2019 (Note 10)

$                         98,688

 

$                                —



 

 

 

Equity

 

 

 



 

 

 

Common stock, $0.001 par value, 110,000,000 shares authorized,

 

 

 

49,318,498 and 45,202,859 shares issued and outstanding at March 31,

 

 

 

2019 and December 31, 2018

$                                49

 

$                                45

Additional paid-in capital

2,097,142 

 

224,800 

Retained earnings

509,455 

 

503,432 

Accumulated other comprehensive loss

(392,588)

 

(391,577)

Total Equity

2,214,058 

 

336,700 

Total Liabilities, Redeemable convertible preferred stock and Equity

$                    4,448,160

 

$                    2,239,519









The accompanying notes are an integral part of these interim condensed consolidated financial statements.

 

1


 

M ercadoLibre, Inc.

Interim Condensed Consolidated Statements of Income

For the three-month periods ended March 31, 2019 and 2018

(In thousands of U.S. dollars, except for share data)

(Unaudited)









 

 

 

 



 

Three Months Ended March 31,



 

2019

 

2018

Net revenues

 

$                  473,770

 

$                 320,976

Cost of net revenues

 

(236,766)

 

(158,218)

Gross profit

 

237,004 

 

162,758 

Operating expenses:

 

 

 

 

Product and technology development

 

(52,369)

 

(38,396)

Sales and marketing

 

(130,676)

 

(110,723)

General and administrative

 

(43,820)

 

(43,058)

Total operating expenses

 

(226,865)

 

(192,177)

Income (loss) from operations

 

10,139 

 

(29,419)



 

 

 

 

Other income (expenses):

 

 

 

 

Interest income and other financial gains

 

24,444 

 

9,195 

Interest expense and other financial losses

 

(15,559)

 

(10,734)

Foreign currency (losses) gains

 

(3,669)

 

5,601 

Net income (loss) before income tax (expense) gain

 

15,355 

 

(25,357)



 

 

 

 

Income tax (expense) gain

 

(3,491)

 

12,438 

Net income (loss)

 

$                    11,864

 

$                 (12,919)







 

 

 

 



 

Three Months Ended March 31,



 

2019

 

2018

Basic EPS

 

 

 

 

Basic net income (loss)

 

 

 

 

Available to shareholders per common share

 

$                            0.13

 

$                               (0.29)

Weighted average of outstanding common shares

 

45,980,255 

 

44,157,364 

Diluted EPS

 

 

 

 

Diluted net income (loss)

 

 

 

 

Available to shareholders per common share

 

$                            0.13

 

$                               (0.29)

Weighted average of outstanding common shares

 

45,980,255 

 

44,157,364 



 

 

 

 















The accompanying notes are an integral part of these interim condensed consolidated financial statements.

 

 

2


 

M ercadoLibre, Inc.

Interim Condensed Consolidated Statements of Comprehensive Income

For the three-month periods ended March 31, 2019 and 2018

(In thousands of U.S. dollars)

(Unaudited)









 

 

 

 



Three Months Ended March 31,

 



2019

 

2018

 

Net income (loss)

$                         11,864

 

$             (12,919)

 

Other comprehensive income (loss), net of income tax:

 

 

 

 

Currency translation adjustment

(294)

 

(15,573)

 

Unrealized net gains (losses) on available for sale investments

2,012 

 

(24)

 

Less: Reclassification adjustment for gains from accumulated other comprehensive income

2,729 

 

796 

 

Net change in accumulated other comprehensive loss, net of income tax

(1,011)

 

(16,393)

 

Total Comprehensive income (loss)

$                         10,853

 

$             (29,312)

 







The accompanying notes are an integral part of these interim condensed consolidated financial statements.

 

 

3


 



MercadoLibre, Inc.

Interim Condensed Consolidated Statements of Equity

For the three-month periods ended March 31, 2019 and 2018

(In thousands of U.S. dollars)

(Unaudited)







 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 



 

 

 

 

Additional

 

 

 

 

 

other

 

 

 

 



 

Common stock

 

 

paid-in

 

 

Retained

 

 

comprehensive

 

 

Total

 



 

Shares

 

 

Amount

 

 

capital

 

 

Earnings

 

 

loss

 

 

Equity

 

Balance as of December 31, 2018

 

45,203 

 

$

45 

 

$

224,800 

 

$

503,432 

 

$

(391,577)

 

$

336,700 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock issued

 

4,116 

 

 

 

 

1,866,496 

 

 

 —

 

 

 —

 

 

1,866,500 

 

Exercise of convertible notes

 

 —

 

 

 —

 

 

 

 

 —

 

 

 —

 

 

 

Unwind Capped Call

 

 —

 

 

 —

 

 

 

 

 —

 

 

 —

 

 

 

Net income

 

 —

 

 

 —

 

 

 —

 

 

11,864 

 

 

 —

 

 

11,864 

 

Amortization of Preferred Stock discount

 

 —

 

 

 —

 

 

5,841 

 

 

(5,841)

 

 

 —

 

 

 —

 

Other comprehensive loss

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(1,011)

 

 

(1,011)

 

Balance as of March 31, 2019

 

49,319 

 

$

49 

 

$

2,097,142 

 

$

509,455 

 

$

(392,588)

 

$

2,214,058 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 









 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 



 

 

 

 

Additional

 

 

 

 

 

other

 

 

 



 

Common stock

 

 

paid-in

 

 

Retained

 

 

comprehensive

 

 

Total



 

Shares

 

 

Amount

 

 

capital

 

 

Earnings

 

 

loss

 

 

Equity

Balance as of December 31, 2017

 

44,157 

 

$

44 

 

$

70,661 

 

$

537,925 

 

$

(282,851)

 

$

325,779 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capped Call

 

 —

 

 

 —

 

 

(45,692)

 

 

 —

 

 

 —

 

 

(45,692)

Changes in accounting Standards

 

 —

 

 

 —

 

 

 —

 

 

2,092 

 

 

 —

 

 

2,092 

Net loss

 

 —

 

 

 —

 

 

 —

 

 

(12,919)

 

 

 —

 

 

(12,919)

Other comprehensive loss

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(16,393)

 

 

(16,393)

Balance as of March 31, 2018

 

44,157 

 

$

44 

 

$

24,969 

 

$

527,098 

 

$

(299,244)

 

$

252,867 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



The accompanying notes are an integral part of these interim condensed consolidated financial statements.



 

4


 



Me rcadoLibre, Inc.

Interim Condensed Consolidated Statements of Cash Flow

For the three-month periods ended March 31, 2019 and 2018

(In thousands of U.S. dollars)

(Unaudited)





 

 

 

 



 

Three Months Ended March 31,



 

2019

 

2018



 

 

Cash flows from operations:

 

 

 

 

Net income (loss)

 

$                         11,864

 

$                       (12,919)

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

 

 

 

 

Unrealized devaluation loss, net

 

1,886 

 

 —

Depreciation and amortization

 

15,694 

 

11,084 

Accrued interest

 

(8,699)

 

(4,447)

Non cash interest and convertible notes amortization of debt discount and amortization of debt issuance costs

 

3,018 

 

7,063 

LTRP accrued compensation

 

13,441 

 

15,737 

Deferred income taxes

 

(14,456)

 

(30,601)

Changes in assets and liabilities:

 

 

 

 

Accounts receivable 

 

337 

 

(9,347)

Credit card receivables

 

35,893 

 

(33,870)

Prepaid expenses

 

3,316 

 

(16,164)

Inventory

 

1,652 

 

(872)

Other assets

 

(5,085)

 

(13,009)

Accounts payable and accrued expenses

 

(491)

 

22,773 

Funds payable to customers

 

63,730 

 

20,613 

Other liabilities

 

12,735 

 

3,041 

Interest received from investments

 

3,536 

 

3,912 

Net cash provided by (used in) operating activities

 

138,371 

 

(37,006)

Cash flows from investing activities:

 

 

 

 

Purchase of investments

 

(1,624,226)

 

(632,734)

Proceeds from sale and maturity of investments

 

439,712 

 

683,909 

Purchases of intangible assets

 

(34)

 

(97)

Advance for property and equipment

 

 —

 

(3,390)

Changes in principal of loans receivable, net

 

(42,609)

 

(52,243)

Purchases of property and equipment

 

(32,928)

 

(19,542)

Net cash used in investing activities

 

(1,260,085)

 

(24,097)

Cash flows from financing activities:

 

 

 

 

Purchase of convertible note capped call

 

 —

 

(45,692)

Proceeds from loans payable and other financial liabilities

 

33,977 

 

80,925 

Payments on loans payable and other financing liabilities

 

(23,816)

 

(4,583)

Payment of finance lease obligations

 

(662)

 

 —

Dividends paid

 

 —

 

(6,624)

Proceeds from issuance of convertible redeemable preferred stock, net

 

98,688 

 

 —

Proceeds from issuance of common stock, net

 

1,866,500 

 

 —

Net cash provided by financing activities

 

1,974,687 

 

24,026 

Effect of exchange rate changes on cash, cash equivalents, restricted cash and cash equivalents

 

(11,407)

 

(772)

Net increase (decrease) in cash, cash equivalents, restricted cash and cash equivalents

 

841,566 

 

(37,849)

Cash, cash equivalents, restricted cash and cash equivalents, beginning of the period

 

$                       464,695

 

$                       388,260

Cash, cash equivalents, restricted cash and cash equivalents, end of the period

 

$                    1,306,261

 

$                       350,411









The accompanying notes are an integral part of these interim condensed consolidated financial statements.





 

 

5


 



1. Nature of Business

MercadoLibre, Inc. (“MercadoLibre” or the “Company”) was incorporated in the state of Delaware, in the United States of America in October 1999. MercadoLibre is the largest online commerce ecosystem in Latin America , serving as an integrated regional platform and as a provider of the necessary online and technology-based tools that allow businesses and individuals to trade products and services in the region. The Company enables commerce through its marketplace platform (including online classifieds for motor vehicles, vessels, aircraft, services and real estate), which allows users to buy and sell in most of Latin America. 

Through Mercado Pago, the Company’s FinTech solution, MercadoLibre enables individuals and businesses to send and receive online payments; through Mercado Envios, MercadoLibre facilitates the shipping of goods from sellers to buyers; through our advertising products, MercadoLibre facilitates advertising services for large retailers and brands to promote their product and services on the web; through MercadoShops, MercadoLibre allows users to set-up, manage, and promote their own on-line web-stores under a subscription-based business model; through MercadoCredito, MercadoLibre extends loans to certain merchants and consumers; and through MercadoFondo, MercadoLibre allows users to invest funds deposited in their Mercado Pago accounts. In addition, MercadoLibre develops and sells software enterprise solutions to e-commerce business clients in Brazil.

As of March 31, 2019, MercadoLibre, through its wholly-owned subsidiaries, operated online ecommerce platforms directed towards Argentina, Brazil, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, Peru, Mexico, Panama, Honduras, Nicaragua, El Salvador, Uruguay, Bolivia, Guatemala, Paraguay and Venezuela. Additionally, MercadoLibre operates an online payments solution in Argentina, Brazil, Mexico, Colombia, Chile, Peru and Uruguay. It also offers a shipping solution directed towards Argentina, Brazil, Mexico, Colombia, Chile and Uruguay. In addition, the Company operates a real estate classified platform that covers some areas of State of Florida, in the United States of America. 



2. Summary of significant accounting policies

Basis of presentation

The accompanying unaudited interim condensed consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP) and include the accounts of the Company, its wholly-owned subsidiaries and consolidated Variable Interest Entities (“VIE”). These interim condensed consolidated financial statements are stated in U.S. dollars, except where otherwise indicated. Intercompany transactions and balances with subsidiaries have been eliminated for consolidation purposes.

Substantially all net revenues, cost of net revenues and operating expenses are generated in the Company’s foreign operations. Long-lived assets, intangible assets and goodwill located in the foreign jurisdictions totaled $294,120 thousands and $ 270,073   thousands as of March 31, 2019 and December 31, 2018, respectively.

These interim condensed consolidated financial statements reflect the Company’s consolidated financial position as of March 31, 2019 and December 31, 2018. These financial statements include the Company’s consolidated statements of income, comprehensive income, equity and of cash flows for the three-month periods ended March 31, 2019 and 2018. These interim condensed consolidated financial statements include all normal recurring adjustments that Management believes are necessary to fairly state the Company’s financial position, operating results and cash flows.

Because all of the disclosures required by U.S. GAAP for annual consolidated financial statements are not included herein, these unaudited interim condensed financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto for the year ended December 31, 2018, contained in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”). The condensed consolidated statements of income, comprehensive income, equity and cash flows for the periods presented herein are not necessarily indicative of results expected for any future period. For a more detailed discussion of the Company’s significant accounting policies, see note 2 to the financial statements in the Company’s Form 10-K for the year ended December 31, 2018. During the three-month period ended March 31, 2019, there were no material updates made to the Company’s significant accounting policies, except for the adoption of ASC 842 and the investments fair value option as of January 1, 2019. S ee Note 2 to these interim condensed consolidated financial statements for more details.

 

6


 

Cash and cash equivalents

Cash, cash equivalents and restricted cash and cash equivalents of $1,306,261 thousands and $464,695 thousands as reported in the consolidated sta tements of cash flow as of March 31, 2019   and December 31, 2018, respectively, is the sum of $1,295,886 thousand s and $10,375 thousands as of March 31, 2019 and the sum of $440,332 thousands and $24,363 thousands as of December 31, 2018 shown in lines Cash and cash equivalents and Restricted cash and cash equivalents of the consolidated balance sheet.

Revenue recognition

Revenue recognition criteria for the services mentioned above are described in note 2 to the consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.



Contract Balances



Timing of revenue recognition may differ from the timing of invoicing to customers. Receivables represent amounts invoiced and revenue recognized prior to invoicing when the Company has satisfied the performance obligation and has the unconditional right to payment. The allowance for doubtful accounts, loans receivable and chargebacks is estimated based upon our assessment of various factors including historical experience, the age of the accounts receivable balances, current economic conditions and other factors that may affect our customers’ ability to pay. The allowance for doubtful accounts, loans receivable and chargebacks was $26,783 thousands and $23,411 thousands as of March 31, 2019 and December 31, 2018, respectively.



Deferred revenue consists of fees received related to unsatisfied performance obligations at the end of the period in accordance with ASC 606. Due to the generally short-term duration of contracts, the majority of the performance obligations are satisfied in the following reporting period. Deferred revenue as of December 31, 2018 and 2017 was $5,918 thousands and $6,116 thousands, respectively, of which $3,188 thousands and $4,316 thousands were recognized as revenue during the three-month periods ended March 31, 2019 and 2018, respectively.



As of March 31, 2019, total deferred revenue was $5,958 thousands, mainly due to fees related to listing and optional feature services billed and loyalty programs that are expected to be recognized as revenue in the coming months.

Leases

The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets and operating lease liabilities in the consolidated balance sheets. ROU assets represent the Company’s right to use an underlying asset for the lease term, which is a non-monetary asset, and lease liabilities represent the Company’s obligation to make lease payments arising from the lease, which is a monetary liability. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the leases do not provide an implicit rate, the Company uses incremental borrowing rates based on the information available at commencement date in determining the present value of lease payments. The operating lease ROU asset also includes any lease prepaid payments made. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term.

According to transition guidance, finance leases that existed at December 31, 2018 are included in property and equipment, and loans payable and other financial liabilities in the consolidated balance sheets.  

Foreign currency translation

All of the Company’s consolidated foreign operations use the local currency as their functional currency, except for Argentina, which has used the U.S. dollar as its functional currency since July 1, 2018, as described below. Accordingly, the foreign subsidiaries with local currency as functional currency translate assets and liabilities from their local currencies into U.S. dollars by using year-end exchange rates while income and expense accounts are translated at the average monthly rates in effect during the year, unless exchange rates fluctuate significantly during the period, in which case the exchange rates at the date of the transaction are used. The resulting translation adjustment is recorded as a component of other comprehensive income   (loss).



Argentine currency status



As of July 1, 2018, the Company transitioned its Argentinian operations to highly inflationary status in accordance with U.S. GAAP, and changed the functional currency for Argentine subsidiaries from Argentine Pesos to U.S. dollars, which is the functional currency of their immediate parent company.



 

7


 

Pursuant to the change in the functional currency, monetary assets and liabilities are remeasured at closing exchange rate, and non-monetary assets, revenues and expenses are remeasured at the rate prevailing on the date of the respective transaction. The effect of the re measurement is recognized as foreign currency (losses) gains.



Argentina is the second largest principal market of the Company’s business, as measured by net revenue (see Note 5 – Segment Reporting). The economic environment in Argentina has been volatile with weak economic conditions, devaluation of local currency, high interest rates, high level of inflation and a large public deficit which led Argentina to request financial assistance from the International Monetary Fund .  

Income tax

The Company is subject to U.S. and foreign income taxes. The Company accounts for income taxes following the liability method of accounting which requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. Deferred tax assets are also recognized for tax loss carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets or liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recorded when, based on the available evidence, it is more likely than not that all or a portion of the Company’s deferred tax assets will not be realized. The Company’s income tax expense consists of taxes currently payable, if any, plus the change during the period in the Company’s deferred tax assets and liabilities.

On August 17, 2011, the Argentine government issued a new software development law and on September 9, 2013 the Argentine government issued a regulatory decree establishing the requirements to become a beneficiary of the new software development law, including a requirement to comply with annual incremental ratios related to exports of services and research and development. The new law will expire on December 31, 2019.

The Argentine Industry Secretary approved the Company’s application for eligibility under the law for the Company’s Argentine subsidiary, Mercadolibre S.R.L. As a result, the Company’s Argentine subsidiary has been granted a tax holiday retroactive from September 18, 2014. A portion of the benefits obtained is a  60%  relief of total income tax related to software development activities and a  70%  relief of payroll taxes related to software development activities.

As a result of the Company’s eligibility under the new law, it recorded an income tax benefit of  $3,319  thousands and  $7,299  thousands during the three-month periods ended March 31, 2019 and 2018, respectively. Aggregate per share effect of the Argentine tax holiday amounted to  $0.07  and  $0.17  for the three-month periods ended March 31, 2019 and 2018, respectively. Furthermore, the Company recorded a labor cost benefit of  $2,396  thousands and  $2,016  thousands during the three-month periods ended March 31, 2019 and 2018, respectively. Additionally,  $400  thousands and  $652  thousands were accrued to pay software development law audit fees during the first quarter of 2019 and 2018, respectively.

Redeemable Convertible Preferred Stock

On March 29, 2019 an affiliate of Dragoneer Investment Group purchased, in a private placement, 100,000 shares of perpetual convertible preferred stock designated as Series A Preferred Stock, par value $0.001 per share (the “Preferred Stock”) , of the Company for $100 million in the aggregate.

The Company determined that the shares of Preferred Stock should be classified as mezzanine equity upon their issuance since they are contingently redeemable as explained in Note 10. The Company also determined that there is a beneficial conversion feature of $5,841 thousands attributable to the Preferred Stock because the initial conversion price was lower than the fair value of MercadoLibre’s common stock on March 29, 2019 (the commitment date). The beneficial conversion feature was fully amortized at issuance, increasing the Preferred Stock’s carrying amount, since the shares of Preferred Stock are perpetual and the holders of Preferred Stock have the right to convert immediately.

In addition, the Company determined that there were no embedded derivatives requiring bifurcation.

Fair value option applied to certain financial instruments

Under ASC 825, U.S. GAAP provides an option to elect fair value with impact on the statement of income as an alternative measurement for certain financial instruments and other items on the balance sheet.

The Company has elected to measure certain financial assets at fair value with impact on the statement of income from January 1, 2019 for several reasons including to avoid the mismatch generated by the recognition of certain linked instruments / transactions, separately, in consolidated statement of income and consolidated statement of other comprehensive income and to better reflect the financial model applied for selected instruments.

 

8


 

The Company’s election of the fair value option applies to the: i) Brazilian federal government bonds and ii) U.S. treasury notes. As result of the election of the fair value option, the Company recognized gains in interest income and other financial gains of $3,048 thousands for the period ended March 31, 2019.

Accumulated other comprehensive loss

The following table sets forth the Company’s accumulated other comprehensive loss as of March 31, 2019 and December 31, 2018:





 

 

 

 



 

March 31,

 

December 31,



 

2019

 

2018



 

(In thousands)

Accumulated other comprehensive loss:

 

 

 

 

Foreign currency translation

 

$                             (394,600)

 

$                   (394,306)

Unrealized gains on investments

 

2,025 

 

3,345 

Estimated tax loss on unrealized gains on investments

 

(13)

 

(616)



 

$                             (392,588)

 

$                   (391,577)



The following tables summarize the changes in accumulated balances of other comprehensive loss for the three-month period ended March 31, 2019:







 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 



 

Unrealized

 

Foreign

 

Estimated tax

 

 

 



 

(Losses) Gains on

 

Currency

 

(expense)

 

 

 



 

Investments

 

Translation

 

benefit

 

Total

 



 

(In thousands)

Balances as of December 31, 2018

 

$                                  3,345

 

$                   (394,306)

 

$                  (616)

 

$                (391,577)

 

Other comprehensive  income (loss) before reclassifications

 

2,025 

 

(294)

 

(13)

 

1,718 

 

Amount of loss (gain) reclassified from accumulated other comprehensive loss

 

(3,345)

 

 —

 

616 

 

(2,729)

 

Net current period other comprehensive income (loss)

 

(1,320)

 

(294)

 

603 

 

(1,011)

 

Ending balance

 

$                                  2,025

 

$                   (394,600)

 

$                    (13)

 

$                (392,588)

 









 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 



 

Amount of (Loss) Gain

 

 

 

 

 

 



 

Reclassified from

 

 

 

 

 

 

Details about Accumulated

 

Accumulated Other

 

 

 

 

 

 

Other Comprehensive Loss

 

Comprehensive

 

Affected Line Item

Components

 

Loss

 

in the Statement of Income



 

(In thousands)

 

 

 

 

 

 

Unrealized gains on investments

 

$                                  3,345

 

Interest income and other financial gains

Estimated tax gain on unrealized losses on investments

 

(616)

 

Income tax loss

Total reclassifications for the period

 

$                                  2,729

 

Total, net of income taxes



 





Use of estimates

The preparation of interim condensed consolidated financial statements in conformity with U.S. GAAP requires Management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates are used for, but not limited to, accounting for allowances for doubtful accounts and chargeback provisions, allowance for loans receivables, recoverability of goodwill, intangible assets with indefinite useful lives and tax loss carryforwards, impairment of short-term and long-term investments, impairment of long-lived assets, compensation costs relating to the Company’s long term retention plan, fair value of convertible debt, fair value of investments, recognition of income taxes and contingencies and determination of the incremental borrowing rate at commencement date of lease operating agreements. Actual results could differ from those estimates.

 

9


 

Recently Adopted Accounting Standards

In February 2016, the FASB issued a new standard related to leases to increase transparency and comparability among organizations by requiring the recognition of right-of-use (ROU) assets and lease liabilities on the balance sheet. Most prominent among the changes in the standard is the recognition of ROU assets and lease liabilities by lessees for those leases classified as operating leases under current U.S. GAAP. Leases are classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. Under the new standard, disclosures are required to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases.

The guidance permits the use of a modified retrospective approach, which requires an entity to recognize and measure leases existing at, or entered into after, the beginning of the earliest comparative period presented. Alternatively, the guidance permits a “Comparatives Under 840 Option” that changes the date of initial application to the beginning of the period of adoption. The Company elected the Comparatives Under 840 Option in which it must apply ASC 840 to all comparative periods, including disclosures, and there were no effects of applying ASC 842 as a cumulative-effect adjustment to retained earnings as of January 1, 2019. The Company elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allows to carryforward the historical lease classification. In addition, the Company elected certain practical expedients and accounting policies including the lessee practical expedient to not separate lease components. The Company also made an accounting policy election to keep leases with an initial term of 12 months or less off of the balance sheet. The Company recognizes those lease payments in the Consolidated Statements of Income on a straight-line basis over the lease term.

The standard had a material impact on the Company’s consolidated balance sheets. The most significant impact was the recognition of ROU assets and lease liabilities for operating leases, while the accounting for existing finance leases remains substantially unchanged.

Recently issued accounting pronouncements not yet adopted

On June 16, 2016 the FASB issued the ASU 2016-13 “Financial Instruments-Credit Losses (Topic 326): Measurement of credit losses on financial instruments”. This update amends guidance on reporting credit losses for assets held at amortized cost basis and available for sale debt securities. For assets held at amortized cost basis, this update eliminates the probable initial recognition threshold in current GAAP and, instead, requires an entity to reflect its current estimate of all expected credit losses. For available for sale debt securities, credit losses should be measured in a manner similar to current GAAP, however this topic will require that credit losses be presented as an allowance rather than as a write-down. The new standard is effective for fiscal years beginning after December 15, 2019. The Company is assessing the effects that the adoption of this accounting pronouncement may have on its financial statements.  

On August 28, 2018 the FASB issued the ASU 2018-13 “Fair value measurement (Topic 820): Disclosure Framework—Changes to the disclosure requirements for fair value measurement”. This update modified the disclosure requirements on fair value measurements based on concepts in the FASB Concepts Statement. The amendments in this update are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The adoption of this standard is not expected to have a material impact on the Company’s financial statements. 

On August 29, 2018 the FASB issued the ASU 2018-15 “Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40)”. The amendments in this update align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The amendments require an entity (customer) in a hosting arrangement that is a service contract to follow the guidance in Subtopic 350-40 to determine which implementation costs to capitalize as an asset related to the service contract and which costs to expense. The amendments in this update are effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. The Company is assessing the effects that the adoption of this accounting pronouncement may have on its financial statements.  

 

10


 

3. Net income (loss) per share

Basic earnings per share for the Company’s common stock is computed by dividing, net income (loss) available to common shareholders attributable to common stock for the period   by the weighted average number of common shares outstanding during the period.

On June 30, 2014, the Company issued $330 million of 2.25% Convertible Senior Notes due 2019 and on August 24, 2018 and August 31, 2018 the Company issued an aggregate principal amount of $880 million of 2.00% Convertible Senior Notes due 2028 (see Note 9 to these interim condensed consolidated financial statements). Additionally, on March 29, 2019 the Company issued Preferred Stock (see Note 2 and Note 10 to these interim condensed consolidated financial statements). The conversion of these notes and the Preferred Stock are included in the calculation for diluted earnings per share utilizing the “if converted” method. Accordingly, conversion of these Notes and the redeemable convertible preferred stock are not assumed for purposes of computing diluted earnings per share if the effect is antidilutive.

The denominator for diluted net income (loss) per share for the three-month periods ended March 31, 2019 and 2018 does not include any effect from the 2019 Notes Capped Call Transactions (as defined in Note 9) or the 2028 Notes Capped Call Transactions because it would be antidilutive. In the event of conversion of any or all of the 2019 Notes or the 2028 Notes, the shares that would be delivered to the Company under the   Capped Call Transactions (as defined in Note 9) are designed to partially neutralize the dilutive effect of the shares that the Company would issue under the Notes. S ee Note 9 to these interim condensed consolidated financial statements and Note 17 of the financial statements as of December 31, 2018 on Form 10-K for more details. For the three-month periods ended March 31, 2019 and 2018 , the effects of the Capped Call Transactions would have been antidilutive and, as a consequence, they were not factored into the calculation of diluted earnings per share.

Net income (loss) per share of common stock is as follows for the three-month periods ended March 31, 2019 and 2018:















 

 

 

 

 

 

 

 



 

Three Months Ended March 2019,



 

2019

 

2018



 

(In thousands)



 

Basic

 

Diluted

 

Basic

 

Diluted

Net income (loss) per common share

 

$                        0.13

 

$                         0.13

 

$                      (0.29)

 

$                      (0.29)



 

 

 

 

 

 

 

 

Numerator:

 

 

 

 

 

 

 

 

Net income (loss)

 

$                    11,864

 

$                     11,864

 

$                  (12,919)

 

$                  (12,919)

Amortization of redeemable convertible preferred stock

 

(5,841)

 

(5,841)

 

 —

 

 —

Net income (loss) corresponding to common stock

 

$                      6,023

 

$                       6,023

 

$                  (12,919)

 

$                  (12,919)



 

 

 

 

 

 

 

 

Denominator:

 

 

 

 

 

 

 

 

Weighted average of common stock outstanding for Basic earnings per share

 

45,980,255 

 

 —

 

44,157,364 

 

 —

Adjusted weighted average of common stock outstanding for Diluted earnings per share

 

 —

 

45,980,255 

 

 —

 

44,157,364 





 

11


 



4. G oodwill and intangible assets

The composition of goodwill and intangible assets is as follows:







 

 

 

 



 

March 31,

 

December 31,



 

2019

 

2018



 

(In thousands)

Goodwill

 

$                         89,827

 

$                         88,883

Intangible assets with indefinite lives

 

 

 

 

- Trademarks

 

8,733 

 

8,584 

Amortizable intangible assets

 

 

 

 

- Licenses and others

 

5,445 

 

5,406 

- Non-compete agreement

 

2,786 

 

3,028 

- Customer list

 

14,844 

 

14,897 

- Trademarks

 

4,676 

 

4,565 

Total intangible assets

 

$                         36,484

 

$                         36,480

Accumulated amortization

 

(18,801)

 

(17,899)

Total intangible assets, net

 

$                         17,683

 

$                         18,581





Goodwill

The changes in the carrying amount of goodwill for the three-month period ended March 31, 2019 and the year ended December 31, 2018 are as follows:





 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

Period ended March 31, 2019



 

Brazil

 

Argentina

 

Mexico

 

Chile

 

 

Colombia

 

Other Countries

 

Total



 

(In thousands)

Balance, beginning of the period

 

$                          30,069 

 

$                            6,946 

 

$                          31,340 

 

$                          16,014 

 

 

$                            3,339 

 

$                            1,175 

 

$                          88,883 

Purchase price allocation adjustments

 

 —

 

45 

 

 —

 

 —

 

 

 —

 

 —

 

45 

Effect of exchange rates changes

 

(145)

 

 —

 

567 

 

392 

 

 

76 

 

 

899 

Balance, end of the period

 

$                          29,924 

 

$                            6,991 

 

$                          31,907 

 

$                          16,406 

 

 

$                            3,415 

 

$                            1,184 

 

$                          89,827 









 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

Year ended December 31, 2018



 

Brazil

 

Argentina

 

Mexico

 

Chile

 

 

Colombia

 

Other Countries

 

Total



 

(In thousands)

Balance, beginning of the year

 

$                          32,492 

 

$                            5,761 

 

$                          30,396 

 

$                          18,805 

 

 

$                            3,632 

 

$                            1,193 

 

$                          92,279 

- Business acquisitions

 

3,110 

 

3,175 

 

543 

 

61 

 

 

80 

 

53 

 

7,022 

- Effect of exchange rates changes

 

(5,533)

 

(1,990)

 

401 

 

(2,852)

 

 

(373)

 

(71)

 

(10,418)

Balance, end of the year

 

$                          30,069 

 

$                            6,946 

 

$                          31,340 

 

$                          16,014 

 

 

$                            3,339 

 

$                            1,175 

 

$                          88,883 



 

12


 

Intangible assets with definite useful life

Intangible assets with definite useful life are comprised of customer lists, non-compete and non-solicitation agreements, acquired software licenses, and other acquired intangible assets including developed technologies and trademarks. Aggregate amortization expense for intangible assets totaled   $1,230   thousands and   $1,672   thousands for the three-month periods ended March 31, 2019 and 2018, respectively.

The following table summarizes the remaining amortization of intangible assets (in thousands of U.S. dollars) with definite useful life as of March 31, 2019 :





 

 

 

 

 

 

For year ended 12/31/2019

 

 

 

 

 

$                          2,720

For year ended 12/31/2020

 

 

 

 

 

2,383 

For year ended 12/31/2021

 

 

 

 

 

1,815 

For year ended 12/31/2022

 

 

 

 

 

1,083 

Thereafter

 

 

 

 

 

949 



 

 

 

 

 

$                          8,950



 

 

 

 

 

 







5. Segment reporting

Reporting segments are based upon the Company’s internal organizational structure, the manner in which the Company’s operations are managed and resources are assigned, the criteria used by Management to evaluate the Company’s performance, the availability of separate financial information and overall materiality considerations.

Segment reporting is based on geography as the main basis of segment breakdown in accordance with the criteria used for  evaluation of the Company’s performance as determined by Management. The Company’s segments include Brazil, Argentina, Mexico and other countries (which includes Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, Honduras, Nicaragua, El Salvador, Bolivia, Guatemala, Panama, Paraguay, Peru, Uruguay and the United States of America).

Direct contribution consists of net revenues from external customers less direct costs, which include costs of net revenues, product and technology development expenses, sales and marketing expenses and general and administrative expenses over which segment managers have direct discretionary control, such as advertising and marketing programs, customer support expenses, allowances for doubtful accounts, payroll and third-party fees. All corporate related costs have been excluded from the Company’s direct contribution.

Expenses over which segment managers do not currently have discretionary control, such as certain technology and general and administrative costs are monitored by Management through shared cost centers and are not evaluated in the measurement of segment performance.

The following tables summarize the financial performance of the Company’s reporting segments:







 

 

 

 

 

 

 

 

 

 

 



 

Three Months Ended March 31, 2019



 

Brazil

 

Argentina

 

Mexico

 

 

Other Countries

 

Total



 

(In thousands)

Net revenues

 

$                302,384 

 

$                      93,776 

 

$                     54,561 

 

 

$                     23,049 

 

$                  473,770 

Direct costs

 

(225,343)

 

(67,492)

 

(65,585)

 

 

(20,447)

 

(378,867)

Direct contribution

 

77,041 

 

26,284 

 

(11,024)

 

 

2,602 

 

94,903 



 

 

 

 

 

 

 

 

 

 

 

Operating expenses and indirect costs of net revenues

 

 

 

 

 

 

 

 

 

 

(84,764)

Income from operations

 

 

 

 

 

 

 

 

 

 

10,139 



 

 

 

 

 

 

 

 

 

 

 

Other income (expenses):

 

 

 

 

 

 

 

 

 

 

 

Interest income and other financial gains

 

 

 

 

 

 

 

 

 

 

24,444 

Interest expense and other financial losses

 

 

 

 

 

 

 

 

 

 

(15,559)

Foreign currency losses

 

 

 

 

 

 

 

 

 

 

(3,669)

Net income before income tax expense

 

 

 

 

 

 

 

 

 

 

$                    15,355 

 

13


 





 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 



 

Three Months Ended March 31, 2018



 

Brazil

 

Argentina

 

Mexico

 

 

Other Countries

 

Total



 

(In thousands)

Net revenues

 

$                184,155 

 

$                    101,939 

 

$                      17,065 

 

 

$                      17,817 

 

$                  320,976 

Direct costs

 

(176,980)

 

(57,295)

 

(26,323)

 

 

(17,272)

 

(277,870)

Direct contribution

 

7,175 

 

44,644 

 

(9,258)

 

 

545 

 

43,106 



 

 

 

 

 

 

 

 

 

 

 

Operating expenses and indirect costs of net revenues

 

 

 

 

 

 

 

 

 

 

(72,525)

Loss from operations

 

 

 

 

 

 

 

 

 

 

(29,419)



 

 

 

 

 

 

 

 

 

 

 

Other income (expenses):

 

 

 

 

 

 

 

 

 

 

 

Interest income and other financial gains

 

 

 

 

 

 

 

 

 

 

9,195 

Interest expense and other financial losses

 

 

 

 

 

 

 

 

 

 

(10,734)

Foreign currency gains

 

 

 

 

 

 

 

 

 

 

5,601 

Net loss before income tax gains

 

 

 

 

 

 

 

 

 

 

$                   (25,357)





The following table summarizes the allocation of property and equipment, net based on geography:





 

 

 

 



 

March 31,

 

December 31,



 

2019

 

2018



 

(In thousands)

US property and equipment, net

 

$                          2,313

 

$                          2,959

Other countries

 

 

 

 

Argentina

 

74,070 

 

58,358 

Brazil

 

83,717 

 

78,227 

Mexico

 

19,372 

 

16,497 

Other countries

 

9,484 

 

9,573 



 

$                      186,643

 

$                      162,655

Total property and equipment, net

 

$                      188,956

 

$                      165,614





The following table summarizes the allocation of the goodwill and intangible assets based on geography:





 

 

 

 



 

March 31,

 

December 31,



 

2019

 

2018



 

(In thousands)

US intangible assets

 

$                               33

 

$                               46

Other countries goodwill and intangible assets

 

 

 

 

Argentina

 

8,607 

 

9,050 

Brazil

 

31,746 

 

32,955 

Mexico

 

36,222 

 

35,993 

Chile

 

25,678 

 

24,638 

Other countries

 

5,224 

 

4,782 



 

$                      107,477

 

$                      107,418

Total goodwill and intangible assets

 

$                      107,510

 

$                      107,464



Consolidated net revenues by similar products and services for the three-month periods ended March 31, 2019 and 2018 were as follows:





 

 

 

 

 



 

Three months Ended March 31,

 



 

 

 

 

 

Consolidated Net Revenues

 

2019

 

2018

 



 

(In thousands)

 

Enhanced Marketplace (*)

 

$                      253,035

 

$                      140,695

 

Non-marketplace (**) (***)

 

220,735 

 

180,281 

 

Total

 

$                      473,770

 

$                      320,976

 







(*)   Includes Final Value Fees and Shipping fees.

(**)  Includes, among other things, Ad Sales, Classified Fees, Payment Fees and other ancillary services.  

(***) Includes $186,965 thousands and $144,763 thousands of Payment Fees for the three-month periods ended March 31, 2019 and 2018, respectively.

 

14


 

6. Fair value measurement of assets and liabilities



The following table summarizes the Company’s financial assets and liabilities measured at fair value on a recurring basis as of March 31, 2019 and December 31, 2018:









 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

Quoted Prices in

 

 

 

 

 

 

 

Quoted Prices in

 

 

 

 



 

Balances as of

 

active markets for

 

Significant other

 

Unobservable

 

Balances as of

 

active markets for

 

Significant other

 

Unobservable



 

March 31,

 

identical Assets

 

observable inputs

 

inputs

 

December 31,

 

identical Assets

 

observable inputs

 

inputs

Description

 

2019

 

(Level 1)

 

(Level 2)

 

(Level 3)

 

2018

 

(Level 1)

 

(Level 2)

 

(Level 3)



 

(In thousands)

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and Cash Equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money Market Funds

 

$                           239,269 

 

$                                     239,269 

 

$                                       — 

 

$                                   — 

 

$                      179,252 

 

$                              179,252 

 

$                               — 

 

$                            — 

Restricted Cash and cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money Market Funds

 

9,556 

 

9,556 

 

 —

 

 

 

24,363 

 

24,363 

 

 —

 

 —

Investments: